Housing Shares Poised to Bounce Back

After the worst year in a decade, housing stocks are poised to have one of the best in the past seven years, per new data from financial data firm FactSet.

The iShares Home Construction (ITB) exchange-traded fund (ETF) has had 17.7 percent growth in 2019, and the SPDR S&P Homebuilders ETF (XHB) has returned 19.3 percent, topping year-to-date growth for both the S&P 500 index (11.6 percent) and the Dow Jones Industrial Average DJIA (12 percent). Housing shares have benefited from the Federal Reserve's changing policy position on borrowing costs to be more dovish, MarketWatch reports. Following the release of new Commerce data this week that new-home construction recently had a two-year low, these housing funds dropped by about 0.6 percent.

On top of that, the Case-Shiller home price index grew by 4.2 percent in December, below economists expectations, and at the slowest rate since housing prices bottomed in 2012. Meanwhile, housing-sensitive Home Depot Inc. HD, -0.17 percent announced disappointing fourth-quarter earnings Tuesday that helped to underscore concerns about Americans appetite for real estate and home improvements.

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